East Coast gas shortage has prosecutors on the lookout for price gougers
WASHINGTON - As the gas shortage continues attorney generals along the East Coast are warning of price gouging.
Gas spiked well above $3.00 a gallon throughout the DMV with some people reporting prices close to $4.00 a gallon.
Download the FOX 5 DC News App for Local Breaking News and Weather
Most states have laws in place to prevent price gouging during a state of emergency.
On Tuesday, Virginia Governor Ralph Northam issued a state of emergency in response to the fuel shortage making price gouging illegal.
Virginia law describes price gouging as a price that "grossly" exceeds the average price charged ten days before the state of emergency.
In D.C. price gouging is prohibited under the current COVID-19 State of Emergency. D.C. however, defines price gouging differently than Virginia. Under the D.C. price gouging statue, it is illegal for merchants to increase profit margins during an emergency.
East Coast Gas Shortage: Gas prices in DC, Maryland and Virginia
Maryland currently has no statue that prohibits price gouging. An executive order put in place by Governor Larry Hogan last year made it illegal for retailers to increase their profits by more than 10% on certain items including fuel. That order, however, expired on April 30.
Chuck Lieberman is an economist and the Chief Investment Officer at Advisors Capital Management. He says price gouging, while sometimes necessary during emergencies, is hard to enforce due to fuel’s ever-fluctuating price.
"Gasoline has what’s called a very low price elasticity. That means if the quantity available goes down by a little bit, the price will rise by a lot. People who need the gasoline for whatever reason will have to pay whatever the price is," Lieberman says.
If you suspect price gouging you’re encouraged to report it to your state’s attorney general.